by Bethany K. Hatef

The Railroad Commission of Texas now requires the disclosure of chemicals used for hydraulic fracturing (fracking) of oil and natural gas deposits.  The disclosure rule, adopted on December 13, 2011, and codified at Rule 3.29 of Title 16 of the Texas Administrative Code, implements fracking disclosure legislation that the state enacted earlier in 2011.  Arkansas, Colorado, Louisiana, Montana, Michigan, Pennsylvania and Wyoming likewise regulate fracking through legislation or regulation.  Given the increasing use of fracking techniques worldwide and heightened public scrutiny of industry practices, an increasing number of states are expected to adopt comparable laws and regulations.

The rule applies to fracking treatments of wells in Texas for which the Railroad Commission has issued an initial drilling permit on or after February 1, 2012.  The rule defines “fracking treatment” as the stimulation of a well by applying fracking fluid under pressure to create fractures in a target geologic formation in order to enhance oil and natural gas migration and production.  The rule requires the supplier (the entity who provides additives for use in fracking treatments) or the service company (the entity that performs fracking treatments) to provide the well operator (the person responsible for the physical operation and control of a well) with the identity of each chemical ingredient intentionally added to the fracking fluid within 15 days of completing fracking treatments.

The rule also imposes new requirements on well operators.  On or before the date a well completion report is submitted to the Railroad Commission, the operator must complete a Chemical Disclosure Registry form and upload it on the Chemical Disclosure Registry, known as FracFocus, a publicly accessible national fracking chemical registry website.  This form includes information about the chemicals and volume of water used in a fracking treatment, as well as other well-related information.  Not required to be disclosed are chemicals: (1) not disclosed to the supplier, service company or operator; (2) not intentionally added to the fracking treatment; (3) that occur incidentally or are otherwise unintentionally present; and (4) eligible for trade secret protection.

A supplier, service company or operator is generally not required to publicly disclose trade secrets unless the Texas Attorney General or a court determines that the information is not entitled to such protection.  If an entity withholds information about a chemical ingredient, it must still disclose specific information to the Commission.  Only certain individuals may challenge a claim of trade secret protection, and if any health professional or emergency responder is given trade secret information, that person must keep it confidential, with limited exceptions for diagnostic or treatment purposes. 

Violations of the rule may subject a person to monetary penalty and/or other penalties or other sanctions and/or lead to revocation of a well’s certificate of compliance (a certificate from the Railroad Commission stating that the well operator has complied with applicable rules).